information about universal credit

zagfles

melly1980 wrote: »

Cheers

So from my perspective, I would be likely to get a similar gross amount but tapered away at a much larger rate thus removing it completely. after that there are no real pension options because they count only 50% of it anyway?

The amount could be a lot bigger as you'd be able to add housing costs, but then the taper would start lower.

The taper is on net income, works out to about 76% once tax and NI kick in, now it's 73%, so not much difference. But at the lower end the taper is much lower with UC - 65% whereas it's over 90% now.

Pensions are unlikely to be a good dodge like they are with tax credits.

melly1980

zagfles wrote: »

The amount could be a lot bigger as you'd be able to add housing costs, but then the taper would start lower..

Even if I have my own house and mortgage? How does that work?

zagfles wrote: »

The taper is on net income, works out to about 76% once tax and NI kick in, now it's 73%, so not much difference. But at the lower end the taper is much lower with UC - 65% whereas it's over 90% now.

Pensions are unlikely to be a good dodge like they are with tax credits.

That means nothing to me

Are you saying that I declare my income to the Inland revenue based on gross pay, minus the tax and NI that I pay then minus 50% of any pension contributions? Then they taper away the difference between that figure and the disregard figure?

ffacoffipawb

zagfles wrote: »

Pensions are unlikely to be a good dodge like they are with tax credits.

Why not???

melly1980

ffacoffipawb wrote: »

Why not???

because the proposal is to only count 50% of your pension contributions when reducing your taxable income figure.

Sixer

melly1980 wrote: »

Right. Lets see if Ive got this right (which is probably not)

They are talking about minimum and maximum disregards - this to me means that they havent decided yet and the disregard will be somewhere within this range.

The disregard itself - is this just a point that the taper will cut in?

As for what they are tapering from - at the moment the current tax credits system gives you x amount per child, x amount for being a couple etc etc then tapers this away. What are the gross amounts given before the taper in UC?

Melly: just to note that you and Zagfles are talking about withdrawal rates for the amount of UC payable.

The OP and I were talking about whether or not single parents and stay at home parents would be required to sign on and look for work like JSA claimants now.

If you don't earn enough money between you, they intend to make you look for more work. Eg: couple with kids of 13 and 14 would need to earn at least £425 a week (2 x full-time jobs at NMW). If they don't, they'd have the same 'look for work' conditions as JSA now. Or they couldn't claim UC.

melly1980

Sixer wrote: »

Melly: just to note that you and Zagfles are talking about withdrawal rates for the amount of UC payable.

The OP and I were talking about whether or not single parents and stay at home parents would be required to sign on and look for work like JSA claimants now.

If you don't earn enough money between you, they intend to make you look for more work. Eg: couple with kids of 13 and 14 would need to earn at least £425 a week (2 x full-time jobs at NMW). If they don't, they'd have the same 'look for work' conditions as JSA now. Or they couldn't claim UC.

Yeah, I realise that now. I have hijacked the thread a bit. Sorry

zagfles

melly1980 wrote: »

Even if I have my own house and mortgage? How does that work?

Remember the UC is replacing all out of work benefits and housing benefits (including SMI - mortgage interest support I think) as well as tax credits.

So your entitlement before the income taper would be the same as someone out of work - who'd now get JSA, SMI etc.

That means nothing to me

Are you saying that I declare my income to the Inland revenue based on gross pay, minus the tax and NI that I pay then minus 50% of any pension contributions? Then they taper away the difference between that figure and the disregard figure?

Something like that. At the moment the combination of all the tapers in JSA/HB/tax credits plus tax/NI means it starts at 100% and reduces in various steps to 73% when only tax credits is left.

Under the UC it'll always be 65% net, this is 65% gross up to the tax threshold then 76% once into tax/NI.

Confused?

ffacoffipawb

melly1980 wrote: »

because the proposal is to only count 50% of your pension contributions when reducing your taxable income figure.

Salary sacrifice will fix that - otherwise a big can of worms for employer contributions for defined benefit schemes!

melly1980

ffacoffipawb wrote: »

Salary sacrifice will fix that - otherwise a big can of worms for employer contributions for defined benefit schemes!

They can quite easily argue that if you have sacrificed your salary that you have deliberately impoverished yourself and they wont pay. Ive paid 15% into my pension this year but deliberately done in on a non-salary sacrifice scheme.

melly1980

zagfles wrote: »

Remember the UC is replacing all out of work benefits and housing benefits (including SMI - mortgage interest support I think) as well as tax credits.

So your entitlement before the income taper would be the same as someone out of work - who'd now get JSA, SMI etc.



Something like that. At the moment the combination of all the tapers in JSA/HB/tax credits plus tax/NI means it starts at 100% and reduces in various steps to 73% when only tax credits is left.

Under the UC it'll always be 65% net, this is 65% gross up to the tax threshold then 76% once into tax/NI.

Confused?

yeah, theyve done really well in making one simple benefits system that they harped on about.

So in short, assume nothing and I could be in a position where I dont qualify for CB but magically qualify for this new means tested benefit. How idiotic.